February 12, 2012 (KHARTOUM) – The Sudanese president Omer Hassan al-Bashir blasted the South Sudan government saying that their decision to suspend oil production amounts to “suicide”.

Sudan’s President Omer Hassan al-Bashir greets the crowd after launching the Darfur Regional Authority in El Fasher on 8 February 2012 (Photo: Reuters)

“They [South Sudan] closed the [oil] pipeline [thus] committing suicide when oil is their only source of living,” Bashir told supporters in Sudan’s eastern state of Gadarif.

Juba took this decision last year in retaliation to Khartoum’s confiscation of 1.7 million barrels of its crude that is exported through Sudan’s pipelines, which carry oil all the way to the coastal city of Port Sudan.

Negotiations between the two sides on how to price the oil transit service reached the deadlock despite months of negotiations mediated by the African Union High Level Implementation Panel (AUHIP).

Sudan asked for at least $32 per barrel of oil exported by the South but the latter swiftly rejected it saying it is outside the international norms.

The Sudanese government has been hoping that the fees would compensate for the loss of the oil reserves that resulted from the secession of the South in July 2011.

Khartoum said that seizing part of the South’s oil was necessary in order to make up for what it calls unpaid fees.

Analysts warned that the stand off will have dire consequences on the economies of the two nations.

Bashir reiterated accusations that the government of South Sudan is working on unseating him by deciding to shut down its oil production.

“They said that when they close South’s oil people here will die and the government will collapse in two months” the Sudanese President said angrily.

He suggested that South Sudanese are ungrateful, saying that it was the Khartoum government that carried out the oil exploration projects after years of civil war fighting and perishing martyrs.

“We extracted it, and now they are coming to us as if they are doing us a favour. They [South Sudan] said they want to give us a grant. We have the upper hand and we will stay this way and we will never be the lower hand Gold willing” Bashir said.

“We have a right owed to us [by South Sudan]. Either they pay it or we take it [by force] or they close this pipeline and wherever they want to take it, [let them] take it.” he added.

Bashir went on to say that losing South’s oil was a blessing as it allowed Khartoum to pay more attention other resources it had.

“Look at this gold. It was not created by Khartoum or brought about by Ingaz and since Sudan existed gold was always there. Why did gold only come out now?” he said.

Sudan hopes rising gold exports will replace oil revenues but experts are sceptical since much of the gold comes from small-scale miners whose output is hard to verify.

Bashir remarks contrast with those coming out of Addis Ababa today where Sudan’s negotiating team reported that Juba expressed willingness to resume exporting oil through the north once an agreement is reached.

The African Union (AU) backed talks in the Ethiopian capital are expected to run until Wednesday. The AU panel hopes technical details, such as a pipeline fee and outstanding arrears.